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Guaranteed Online Personal Loans Explained

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Guaranteed Online Personal Loans Explained Powered By Docstoc
					For anyone thinking about borrowing money from, a guaranteed online personal loan
can be both secured and unsecured.

But what are they?

Well the unsecured loan is just that, unsecured for the lender. This simply means that
the lender in effect has to take you at their word that you will repay the loan plus any
interest. As the risk to the lender is greater due to the fact that if loan repayments are
not maintained. The interest rates for unsecured loans reflect the increased risk to the
lender and for that reason are considerably higher than those for secured loans. In the
event that a borrower fails to keep up repayments on an unsecured loan, the lenders
only power is t issue a default against the borrower which is placed on the borrower's
credit file for up to six years. This default notice may be removed by the lender if the
borrower later fulfils their obligation set out in the credit agreement. Generally
speaking a default once recorded will markedly reduce the chances of the borrower
obtaining credit as any future lender will see the default as a large increase in risk. In
the unlikely event that a lender does offer finance, it is highly likely that the interest
rates will be high reflecting the increased risk to the lender.

So how does a secured loan differ from that of an unsecured loan?

To describe secured loans is relatively straightforward. Secured loans can be
guaranteed online personal loans which are secured against a property. They are only
accessible to persons owning their own property or holding another asset which the
loan can be secured against. Unlike unsecured loans, a lender sees a secured loan as
much less of a risk; why is this?

Well unlike unsecured loans which have no security for the lender, secured loans are
secured against an asset, usually a property. A guaranteed online personal secured loan
credit agreement will in the event the borrower fails to keep up repayments, allow the
lender to force the sale of the asset on which the loan was secured. They will be able
to get their money back and the borrower will lose the asset. Therefore it is highly
advisable to ensure that you can keep up repayments on any borrowing secured
against you home. A lender will not think twice about forcing the sale of a property to
recoup monies and the term repossession should be etched in your brain when
considering borrowing against you home. Guaranteed online personal loans should
only be considered after you have compiled a detailed budget and this topic is the
subject of another article.

				
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